Companies trip up on skills to tackle labour unrest

CHENNAI: With the economic slowdown manifesting itself in the form of decreasing production and pay cuts, labour unrest has been growing over the past year. While Maruti and Hyundai were facing labour heat till recently, companies like Toyota and Ford are grappling with labour issues this year.


While economic reasons have their role, HR experts believe that lack of communication, transparency and skill in industrial relations have made matters worse.

"Individual livelihoods are at risk. You have to appeal to emotion and intellect of the employees. Organisations are treating employees in a more transactional manner now. These incidents are more a result of fractured human communication exaggerated by economic and social conditions," said Nishchae Suri, Head of People and Change, KPMG India.

Many observers said that multinational firms, especially in times of distress, take decisions at their central headquarters which impact operations globally and local considerations matter little. "There has to be communication and logic. Labour issues typically arise when there is no logic," said Rajiv Krishnan, partner and India leader - People and Organisation at Ernst & Young (EY). However, he said that one "cannot have job security along with increasing pay" today.

Workers' representatives are of the view that many a times these cuts are unexplained. "At Ford, production last year was better than the year before. When they were doing well, they didn't give extra. Now, they are trying to cut incentives in the name of various things," said A Soundararajan, state general secretary of Centre of Indian Trade Unions (CITU) and a MLA. "Lower production doesn't necessarily warrant a cut in workers' salaries. Why don't they cut it from their profit?"

Most HR professionals agree that lack of specialising in Industrial Relations (IR), the study of labour relations and management, was hurting the manufacturing industry. "There has been a continuous movement of HR talent from manufacturing firms to knowledge-based firms," said Krishnan of EY. "Earlier, most of the top HR leaders came from an IR background in manufacturing industry which is no longer the case."

"IR is no longer an aspirational skill even though it lies at the hear of an HR job in a manufacturing firm. Unfortunately it is no longer the focus. The IR knowledge base has evolved significantly but it is not imparted in our educational institutes," said Suri of KPMG. "There is a dearth of IR skillset in the country."

Aditya Narayan Mishra, president - staffing at Randstad India, said that an increasingly younger workforce is more expressive about their needs. "Average age of employees is coming down. All of them are better networked socially than their predecessors," he said. "15-20 years ago, these situations might not have happened. They are more expressive and want better standard of living."

"Definition of blue collar has changed. They are no longer the uneducated labour from rural areas. They come with exposure and education in many cases," said Krishnan. In such a scenario, how an organisation practices fairness becomes paramount, said Mishra. "If a company is facing trouble, the effects of it have to be shared equally by all. You can't put all the cuts on one section while the other section goes untouched. At times, this fairness is not observed," he said.

Ford staff protest incentive cut

CHENNAI/ BANGALORE: Ford India's employees at its Chennai car plant are avoiding canteen and transportation facilities as a mark of protest against lower incentives and await a meeting with the management next week. Production was, however, not impacted. Ford India, according to employees, lowered its incentive package to its employees from 26% to 15%. Employees are peeved that the cut has come at a time when Ford produced 1.22 lakh vehicles as against 1.06 units previously. The company, however, termed the incentives on performance metrics a transparent process, adding "there are multiple dimensions in determining performance metrics which varies year on year basis internal and external factors".

Meanwhile, a day after lifting the lockout at its manufacturing facilities in Karnataka, Toyota Kirloskar Motor (TKM) said that it has resumed limited plant operations with the help of non-unionized workers. Around 4,200 workers are part of the company's union and have not joined work following a standoff between them and the management over the signing of undertakings related to good conduct.